Shell Slams Australia's Plan to Force LNG Producers to Supply Domestic Market

Shell has spoken out against a plan by the Australian government to ensure domestic gas supply by mandating LNG producers to reserve certain volumes of their output for domestic use.

“Fundamentally, it's a sledgehammer to crack a nut.

And it is an extraordinarily heavy-handed intervention into a market that is actually working well,” Shell Australia’s chairwoman, Cecile Wake, said at an industry event in Australia, as quoted by Reuters.

The proposal for building a domestic gas reserve was first tabled in May this year, in response… Home Oil Prices Oil Futures Rig Count Energy Energy-General Oil Prices Crude Oil Heating Oil Gas Prices Natural Gas Coal Company News Interviews Geopolitics Alternative Energy Nuclear Power Solar Energy Hydroelectric Renewable Energy Geothermal Energy Wind Power Fuel Cells Tidal Energy Biofuels Environment Global Warming Oil Spills Company News Breaking News Premium Articles My Account Get Exclusive Intel All Prices OPEC Blends Canadian Blends U.S.

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“Fundamentally, it's a sledgehammer to crack a nut.

And it is an extraordinarily heavy-handed intervention into a market that is actually working well,” Shell Australia’s chairwoman, Cecile Wake, said at an industry event in Australia, as quoted by Reuters.

The proposal for building a domestic gas reserve was first tabled in May this year, in response to worry about looming gas shortages in parts of the country, notably the east coast.

The east coast of Australia is particularly vulnerable to supply shortages.

Last year, the country's competition regulator warned the market could swing into a deficit by December.

Originally, the rules stipulated that producers should reserve 20% of output for the Australian market.

Now, the proposal is for up to 20% of output to be reserved for the domestic market.

This is probably still too much for the supermajors running LNG facilities off the Australia cost at a time when the global gas market has lost a fifth of its supply due to the QatarEnergy force majeure.